ACA: Fighting Retrans For 10 Years

While the major cable and satellite operators are leading the assault in Washington on broadcasters’ retransmission consent prerogatives, a small cable trade group is attacking their dealmaking capability from an entirely different angle.

The Pittsburgh-based American Cable Association has been going after joint sales and shared services agreements that some broadcasters use to operate more stations in a market than they may own under the FCC’s local ownership limits. By allowing a single station group to represent multiple stations, ACA contends, the agreements give the broadcasters undue negotiating leverage.

“Like a dog with a bone,” is how Sinclair Broadcast Group describes ACA in a recent filing at the FCC.

Sinclair is miffed because ACA, which has nine full-time employees, used a petition to deny to target sharing arrangements proposed in the Baltimore broadcasting giant’s $985 million acquisition of Allbritton Communications.

“ACA refuses to let go of this issue, even though the FCC has rejected the ACA’s argument [against station sharing arrangements] on numerous occasions,” Sinclair says.

ACA has been using that tactic with increasing frequency.

It filed against Sinclair’s $90 million acquisition of New Age Media’s eight TV stations. And along with Time Warner Cable and DirecTV, it asked the FCC to scuttle Gannett’s proposed $2.2 billion merger with Belo, alleging that the transaction would give Gannett “new virtual duopolies and facilitate coordinated retransmission consent negotiations” in St. Louis, Phoenix and Tucson, Ariz. 

“That’s why these mergers haven’t sailed through, and why they are under significant scrutiny,” says Matt Polka, ACA president.

Along with filing comments at the FCC and lobbying Congress, ACA, which was formed in 1993 to serve as the voice for smaller cable operators, has also sought to change policy by pressing for merger conditions, including the programming access provisions that were placed on Comcast’s 2011 acquisition of NBC Universal.

“Matt’s members get more bang for the buck than any other trade group,” says Preston Padden, the former lobbyist for The Walt Disney Co. who is now executive director of the Expanding Opportunities for Broadcasters Coalition.

 ACA has been raising the alarm about retransmission consent for more than 10 years, because its smaller members felt the pinch from the fees from the beginning.

 “We’re the canary in the coal mine, because we, as smaller operators, [first] felt the harm of these outdated rules as the marketplace changed,” Polka explains. “We’re the smaller provider with less leverage than anybody, so we’ve seen this coming.”

“Now it just happens to be the case that you have the very largest MVPDs—with the exception of Comcast—along with us in the fight to reform retransmission consent,” Polka adds. “That’s how much things have changed.”

Even assuming the FCC or Congress approves some modest retrans reforms in the near term, neither the reform movement nor ACA is likely to go away.

“ACA’s concerns about the broken retransmission consent market are not limited to preventing broadcasters from coordinating their retransmission consent,” Polka says. “It’s not outside of the realm of possibility … to see broader reform down the road.”